The meteor is coming

The role of the private equity backed CFO

Our third survey examining the role of the private equity backed CFO reveals that an unprecedented period of change brought on by technological advances will, in the years ahead, profoundly transform the role, making it much more varied, proactive and analytics-driven.

We interviewed over 100 CFOs, PE investors, CEOs and Chairs to create a picture of their top priorities and preoccupations today, and asked them all to look to the future – to predict how they think the role of the CFO will evolve in this era of great disruption.

Methodology

Key Insights

The great gap: CFO vs. investor expectations

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Impact: The technology meteorite


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Extinction: From finance steward to “Chief Value Extractor”

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Evolution: A world of opportunities

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Contacts

Deloitte's multi-disciplinary approach to serving PE backed organisations helps in creating and safeguarding value, inspires and develops talent, and drives insights and strategies for success.

If you would like more information about this report or have particular queries, please contact one of the following:



Andy Halls

Lead Partner, Private Equity-Backed Business Programme
Deloitte Private

Email Andy

+44 121 695 5974

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Matt Ward

Partner, Private Equity Backed Audit & Assurance
Deloitte Private

Email Matt

+44 2380 35 4208

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Download report If you would like more information about this report or have particular queries, please contact the team deloitteprivate@deloitte.co.uk.
The meteor is coming

Methodology

The objective of our 2019 research is to provide fresh insights and perspective into the changing role of the private equity backed CFO in an era of great change and technological disruption.

The process was two-fold:

  • First, we gathered quantitative research based on the answers that respondents (CFOs, Chairmen, CEOs and PE investors) gave to a set of background questions in a multiple-choice format to highlight key themes and top-ranking priorities in order to set the scene.
  • This was followed by a more extensive interview to discuss open-ended questions. More discursive in nature, these questions allowed us to gauge the sentiment of the participants on the topics discussed.

We conducted the survey between March and June 2019 and interviewed 112 participants in companies of varied international footprints across different industries.

A majority of interviewees came from companies with group turnover of £0-£100m (51%), more than 70% of the companies have turnover below £250m. Only 3% of the interviewed companies had a turnover over £1bn.

Analytics and Modelling

To analyse the survey’s results and identify key trends and themes, Deloitte’s analytics team used an innovative analytical and modelling approach.

In order to better navigate the large amount of unstructured data we collected after interviewing 112 participants, the analytics team transformed the information from background and interview questionnaires provided into a structured database to enable its visualisation in an interactive visualisation dashboard.

The dashboard offers a number of features, allowing users to engage with the data sets at a very detailed level and refine the survey’s results based on the various criteria selected (role, industry, size of the business or geography, etc.).

Sentiment Analysis

Sentiment analysis is a part of Natural Language Processing (NLP) whose purpose is to determine the attitude or emotions expressed in words and sentences. Using Textblob, an open source Python application programming interface (“API”), Deloitte’s analytics team ran an analysis on the answers to the survey’s open-ended questions to reveal the feelings of the respondents and present them in a visual form. A sentiment analysis provides two scores: polarity (sentiment orientation: negative, positive or neutral) and subjectivity (to measure if a sentence expresses personal feelings, views or beliefs). The team was also able to create a word cloud based on the sentiment analysis, which shows how often a word is mentioned. The size of the word in a cloud is proportionate to its frequency.

Other than common words the respondents would naturally mention in normal discourse during interviews when discussing the future role of the PE backed CFO such as ‘business’ or ‘finance’, the use of other words such as ‘technology’, ‘value’, ‘time’, ‘change’, ‘data’ highlights the current concerns of the key players in the PE environment.

The word cloud also reveals the subtle but telling differences in the words most frequently used by CFO and PE investors. ‘Data’, ‘information’ and ‘quality’ appear to be used more often by PE investors for instance, whilst CFOs cited ‘function’, ‘technology’ and ‘challenge’ on more occasions than the former.